Warsh Steers Fed Clear of Politics with Surprise Rate Hike

Fed Chair Kevin Warsh's decision to raise interest rates by a quarter point has been seen as a demonstration of the central bank's independence from political considerations.

The Federal Open Market Committee (FOMC) voted unanimously to hike its baseline rate, taking it to a range of 3.75 percent to 4 percent.

Warsh cited persistent inflation as the reason for the increase, noting that annual inflation was 3.4 percent in August, above the central bank's 2 percent target rate.

'The plain fact is that inflation is too high and has been for too long,' Warsh told reporters.